Major international company shuts down operations in South Africa
Global consultancy Bain & Company has announced that it will be shutting down its consultancy operations in South Africa.
The group told the Financial Times and confirmed with News24 that it would be winding down its local operations, while leaving its Johannesburg office as a services hub for its global clients.
It added that local employees would be retained. The services hub will provide general and back-end functions, with no further sales to clients locally.
Bain & Co has been struggling to regain a foothold in South Africa after it was banned from providing any services to the South African government in 2022.
The group suffered immense reputational damage alongside other consultancies and global companies like McKinsey & Co, SAP, KPMG and ABB after being flagged by the State Capture Commission for dodgy contracts with state entities.
Bain’s controversual involvement relates to a contract with the South African Revenue Service (SARS), which was gutted by the Zuma administration and former commissioner, Tom Moyane.
The group was contracted to restructure SARS but was instead implicated in actions that contributed to weakening the institution’s enforcement capabilities.
The group subsequently admitted to “making mistakes” in its consultancy work with SARS and the contracts it won between 2014 and 2017.
However, it denied working to undermine the revenue service.
While investigations by Baker McKenzie found no intention by Bain & Co to “destroy or undermine” SARS, the consultancy admitted to severe irregularities and “errrors” in attaining the contracts.
This included the firm having knowledge of the request for proposal (RFP) before it was formally issued; overstating the case for the changes at SARS it was consulting on; and knowing of the former SARS leadership having a “different agenda” than what the group was working towards.
The group ultimately placed the blame on “lapses in leadership” by Bain South Africa’s former office head, who “displayed poor judgement” in drawing the company into the SARS assignment in the first place.
When the final State Capture Commission findings were published, the group maintained that it did not knowingly participate in state capture, and that it had operated in good faith.
Neverthless, the group was deemed persona non grata by the state, with President Cyril Ramaphosa as recently as December 2024 calling on businesses and entities outside of the government to cut ties with it.
Despite stating clear intentions to win back trust in South Africa, the latest announcement reveals that these efforts have largely been in vain. The company had been operating in South Africa since 1997.
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